First, the Enforcement Decree of the Corporation Tax Act of Korea was amended this year to allow expanded preferential tax treatment in an acquisition of a Korean company.
Before the present amendment, a majority/controlling shareholder could avail of “preferential tax treatment” in Korea only if the shareholder in the Korean company retained the shares for at least three fiscal years.
The amendment provides an exception for instances when the shareholder is required to dispose of shares because of Korean legal prohibitions in owning the shares.
Additionally, the amended Enforcement Decree will allow foreign corporations operating in Korea to deduct the untaxed reserve income from taxable income.
The updated Korean Enforcement Decree of the Corporation Tax Act also allows the more convenient utilization of deductions for donations to charities in Korea.
Other articles that may be of interest on Korean Tax Law:
- Korea Tax Tribunal on the Adjustment of Value of Imported Goods and Transfer Pricing
- Korean Corporate Tax Changes of 2011
- Korea Islamic Bond Tax Bill May is Doomed because of Fundamentalist Christians
- Tax Exempt Foreign-Denominated Bonds in Korea Coming to an End for Holders with Offices in Korea