Proposed by the Chairman of the Strategy and Finance Committee of the Republic of Korea on September 20, 2018, the Amendment to the Korean Restriction of Special Taxation Act came into force on January 1, 2019. The amendment has decreased the taxation burden of some landlords.
The Act was amended in favor of Korean landlords who renew long-term rentals with tenants by charging a lower increase of rent by a percentage lower than a percentage set by Presidential Decree. This Act shall reduce, in general, the tax burden of these Korean landlords.
Art 96-2 Restriction of Special Taxation Act of the Republic of Korea states that “…when a national of the Republic of Korea who runs a housing rental business has earned a sum from that business a total income not exceeding 75 million won in a single taxable year, and has rented a commercial building to the same tenant for more than five years, while increasing the rent at a rate equivalent to or less than the rate set by Presidential Decree, he or she shall be entitled to an income tax or corporate tax reduction equivalent to 5 percent.”
If you already provide or plan to provide housing for renters in the Republic of Korea our professional team of Korean and international lawyers at IPG are happy to advise on reducing tax liabilities and structuring the investment.
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