Up until a recent amendment to the Korean Commercial Code and tax law, in order to qualify for a “tax qualified merger,” at least 80% of the paid consideration must be paid in the stocks of the surviving company to the shareholders of the company being acquired. This law, thus, precludes the ability to receive this tax benefit in triangle merger situations.
A triangle merger is, in short, when a subsidiary owned by the acquiring company (surviving company) merges with the seller.
A recent amendment provides an exception for triangle mergers. The exception will be available from April of 2012.
Recent posts on Korean Tax Law:
- Korea Tax Tribunal on the Adjustment of Value of Imported Goods and Transfer Pricing
- Tax Qualified Mergers in Korea
- Korean Individual Income Tax Rates: Incomes Taxes Rates on the Rise in Korea
- Korean Corporate Tax Rates: Corporate Taxes to Rise in Korea
- Korea Islamic Bond Tax Bill is Doomed because of Fundamentalist Christians
- Tax Exempt Foreign-Denominated Bonds in Korea Coming to an End for Holders with Offices in Korea
IPG will be updating the readers of The Korean Law Blog, The Asian Law Blog and The China Law & Business Blog on updates to China, Bangladesh, Cambodia, Korea the Philippines, Vietnam tax law over the next couple of weeks on IPG’s blogs.
- Amendments to Corporate Tax Rates in Korea for 2012: Korea Corporate Tax Rates in Korea
- Personal Tax Rates in Korea to Rise in 2012: Individual Income Tax Rates in Korea
- Korean Tax Laws on Entertainment Companies in Korea: Overseas Tax Deductions
- Korea’s Temporary Investment Tax Credit Expired at End of 2011: R&D, Investment & FDI Credits Still Available
- 17 Percent Flat Tax for Foreign Nationals Residing in Korea: Korean Tax Amendments for 2013
- Statutes & Regulations Governing Business Combinations in Korea: Korean Mergers & Acquisitions Basics
- Statutory Severance Obligations in Korea after Acquisition of Company in Korea
- Korean M & A Due Diligence Checklist: Mergers & Acquisitions Due Diligence in Korea
- Korea May Not Eat Apple’s Double Irish with a Dutch Sandwich Tax Strategy
- Korea Merger Remedies by Korea Fair Trade Commission