Hyundai Motor Group could save 65.9 billion won ($60 million) in tax if it succeeds to get state recognition for its 10 trillion won acquisition of the Korean Electric Power Corporation site as a corporate investment, industry watchers said Friday.

The possibility arose after the government on Thursday announced a slew of tax reforms encouraging business companies to spend cash in the market.

According to the rule, a company that does not spend 80 percent of its income in investment, wage or dividend will have to pay a 10 percent tax on its cash reserves.

Hyundai, the world’s fifth-largest carmaker, has hardly made an effort to share its profits, making the company eligible for taxation, a Finance Ministry official told The Korea Herald.

Based on data compiled by the Korea Corporate Governance Service on net profit, labor cost, dividend and other investments by Hyundai, the tax amount is estimated at around 65.9 billion won. The only way to get the tax deduction is for the company’s real estate purchases to be considered as investments, industry insiders say. The decision is due in February.

Hyundai bought the site in September, announcing that it would house a global vision center, a convention center, a hotel and a theme park apart from its headquarters.

“Currently, only the purchase of land for factories and workplaces is considered as an investment. If the range becomes too broad, other companies may abuse it by purchasing land for speculation in real estate,” said Kim Kun-hung, chief of Finance Ministry’s corporate tax division.

Another conglomerate that is likely to be affected by the new law is Hanwha, which in November announced that it would acquire four Samsung subsidiaries.

The 2 trillion won deal is unlikely be acknowledged as a corporate investment, thus making it difficult for the country’s 10th-largest enterprise to get a tax break, either.

“This may be seen as an investment from Hanwha’s perspective. However, as the merger simply changes the ownership of the companies, the household income is not affected by this deal in any way,” a Finance Ministry official said of why Hanwha could not receive a tax exemption.

Hyundai remained prudent about the possibility of saving the extra 65.9 billion won.

“We did not purchase the land for investment purposes in the first place, so we will not be perturbed by the taxation decision,” said Baek Byung-wook, a Hyundai spokesman.

“However, if we get those tax exemptions, it would be good for us because we have more room to invest in other areas,” he added.

By Shin Ji-hye (shinjh@heraldcorp.com)