The Republic of Korea and Hong Kong signed a double taxation treaty on July of 2014. The treaty will come into force, if ratified, by the respective assemblies.
Under Korea Tax Law, the, normal, withholding tax is 22%. The main purpose of the treaty is to reduce this rate and, also, allow the governments to share information on potential tax evaders.
This double taxation treaty, among other things, includes provisions for:
- A 15% Withholding Tax on dividends and a 10% Withholding Tax if the company receiving the funds owns a minimum 25% interest in the company remitting the dividends;
- A 10% Withholding Tax on most interest and royalties;
- A cooperation mechanism to share tax information in order to apprehend Korean tax evaders; and
- Taxation on capital gains, only, in the country where the income was earned.
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.
- Witholdings Taxes on Transactions between Korean & Hong Kong Companies
- Minority Squeeze-outs in Companies in Korea
- Korean National Tax Service Tax Law News Release to Foreign Corporate Taxpayers: Korean Tax Law Updates
- 17 Percent Flat Tax for Foreign Nationals Residing in Korea: Korean Tax Amendments for 2013
- Establishing a Company in Korea: New Korean Corporate Forms Available under Revised Korean Code
- Korean Arbitration Basics: Links to Relevant Resources in Korea.
- Korean Criminal Law: Double Jeopardy in Courts in Korea
- File Your U.S. Taxes in Korea: Earned Income Tax Exclusion/FBAR
- Korean Tax Law Amendment Press Release by Korean Government
- International Child Abduction in Korea: Removing a Child Back to the Country of Residence of the Custodial Parent via the Korean Courts Explained