The Korean National Assembly passed a proposal by the Ministry of Economy & Finance and the Ministry of Interior & Safety related to Taxation of Businesses and Individuals in December of 2020. The Amendments shall take effect in 2021. The following is a summary of the major amendments to Korea’s Tax Code and regulations related to individuals in 2021. For an article on Taxation for Corporations please see: Korean Corporate Tax Law Amendments for 2021. 1. Amendment to Administrative Fines under the International Tax Coordination Law of
Continue readingCategory: Korean Tax Law
South Korea to Impose Taxes on Cryptocurrency in 2022
The Ministry of Economy and Finance confirmed that on the 1st of January 2022, profit from cryptocurrencies shall be subject to a 20% tax. And gifts and inheritance in the form of cryptocurrencies shall be taxed by the same rate of 20%. Exempted from Cryptocurrency Tax Any profit, gift and/or inheritance worth 2.5 million won and below will be exempted from the cryptocurrency tax. And only the profit, gift or inheritance in excess of 2.5 million won will be covered by the 20% tax on cryptocurrency, according
Continue readingKorean Tax Incentives for 2020: Korean Tax Law Updates
Because of increased tax liabilities of many companies in Korea and because of perceived deteriorating market conditions, the Korean government implemented programs that may assist some SMEs, and larger companies doing business in Korea. Numerous conditions apply for each of these incentive/abatement tax programs below. The following is, only, intended as a basic explanation of the programs that may be available to businesses operating in Korea. Tax Support for Investments in Korea Investments in facilities that “improve productivity” shall receive an increased tax credit for a period
Continue readingAmendment to the Korean Foreign Investment Promotion Act 2019 – Investment Incentives in Korea
The Korean Foreign Investment Promotion Act (hereinafter referred to as “FIPA”) is intended to support foreign investment in Korea by providing investment incentives to investors in the Korean market. The Korean National Assembly amended the FIPA this year. Key facts about the Korean FIPA The Korean FIPA shall “…promote foreign investment in Korea by providing necessary support and benefit and to contribute to the sound development of the nation’s economy.” (FIPA Art. 1). FIPA may benefit foreign investors, including, individual investors, companies established in foreign jurisdictions, local
Continue readingTax Breaks for Korean Landlords: Real Estate Taxation Basics
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
Continue reading7 Musts to Succeed in Business in Korea
We have the unique pleasure to have a bird’s-eye view of numerous clients’ businesses in Korea. At this stage of our experience in Korea we are, typically, able to determine which companies will, likely, succeed and which companies will, likely, fail. We are far from perfect, but companies that succeed in Korea, normally, have the following seven things in common: 1. Comprehensive Understanding of the Korean Market by a Neutral Local Consultant This understanding, normally, comes from one of the few business consultants, in Korea, that are
Continue readingBithump Crypto-Currency Exchange in Korea to Ban Trading in 11 Countries
With the Korean government auditing Korean Alt Currency exchanges and the Korean government looking at the regulation of crypto-currency, a major exchange, in Korea, has banned the trading on the exchange from Iran, Syria, Iraq, Ethiopia, Serbia, Sri Lanka, Trinidad and Tobago, Tunisia, Vanuatu, and Yemen. These aforementioned nations are on the Financial Action Task Force’s Non-Cooperative Countries or Territories black list. This Task Force, an intergovernmental agency, has deemed these countries to not have sufficient legal procedures in place to assist in preventing the laundering of money.
Continue readingCompany Car Expense Deductions in Korea: Korean Tax Law Updates
Companies, in Korea, sometimes provide senior employees of the company a company car. A tax issue arises concerning the deduction of car expenses and the refunding of VAT. In practice “company cars” are, often, used for the company as well as private use. Thus, Korea has excluded the deduction of expenses and the exclusion of VAT for some automobiles. Corporate Tax Law formalities require Korean companies and Foreign Capital-Invested Companies, in Korea, to have detailed operation records or sufficient evidence to claim deductions and exclusions. The rules
Continue readingTax Liability of Controlling Shareholders in a Korean Company: Tax Law Updates
Under Article 39 of Korea’s Framework Act on National Taxes, unpaid taxes owed to the Korean government are enforceable against certain “ologopolistic” shareholders of respective debtor company’s shareholder. This secondary liability of shareholders is codified within the Framework Act on National Taxation. Article 39 of the Framework Act on National Taxes, specifically, notes that: “Where the property of a corporation is not enough to pay national taxes, additional dues and disposition fees for arrears imposed upon or to be paid by the corporation, any person who falls
Continue reading
You must be logged in to post a comment.