Category: Korean Tax Law

Special Income Tax Regime for Foreign Workers under Article 18-2 of the Special Tax Treatment Control Act has been amended.  Now the 17% flat tax will, only, apply to: Employees that are not related parties to their employers.  An exception applies to companies that are authorized to receive tax incentives; and Employees for, only, a 5-year period.  Not happy news for many foreigners in Korea.  _______Sean Hayes may be contacted

A proposed amendment to the Individual Consumption Tax Act  that was to impose a 20% consumption tax on bags with an importation price of over KRW 2million was abandoned by the tax subcommittee of the Korean National Assembly’s Strategy and Financial Committee until 2014.  The tax would have likely hit many of the super luxury brands such as Louis Vuitton, Fendi, Prada and the like.   The main, facial, purpose of

In an attempt to spark a resurgence in Foreign Direct Investment in Korea, the Korean government has proposed the development of Mini Free Economic Zones.  These zones are an attempt to attract SMEs that supply parts to Korean companies.  These Mini-FEZs are expected to charge rent far lower than market value in Korea, offer tax incentives, while offering no fee leases for companies that bring into the country technology and

This Week’s Legal News Reported by Media Missouri-Korea $1.2 billion trade agreement French minister-Korea visit US lawmakers-Korea caucus Korea’s vice justice minister resigns but denies allegations of sexual misconduct More U.S. work visas for Koreans on the cards Korea flirts again with Tobin Korea, U.S. officials discuss sanctions against Pyongyang Carter reaffirms U.S. commitment to Korea U.S. promises Korea all military resources Seoul says ready to talk to North on

As we all know, everyone loves to pay taxes.  Korea, over the past decade, has dramatically revised the Korean Tax Code to deal with changes in the nature of Korean business and Korean tax evaders.  Some have criticized the National Tax Services (NTS) for being reactionary.  I do not, completely, agree.  I will be writing about a few amendments over the next couple of weeks that may not be welcomed

Apple employs a popular tax reduction scheme called a Double Irish with a Dutch Sandwich.  The scheme is legal under Korean law.  Some media sources, in Korea, have been engaging in a relentless assault on Apple, possibly, motivated by issues that Samsung is having in courts abroad.  I worry that Korea will, again, harm its reputation abroad by engaging in some reactionary measures against Apple and other foreign competitors of

This has not been a good year for foreign chambers of commerce in Korea – particularly for their executive employees. This spring the Korea German Chamber of Commerce & Industry conducted a forensic self audit and found its senior executive employee had been regularly using moneys for his personal use without prior approval of the president and board. That led to that employee’s immediate dismissal. The Korea European Union Chamber

The Temporary Investment Tax Credit has expired and other tax liberalization plans have been scrapped  because of a reduction in tax receipts by the government and political issues that have arisen because of the the upcoming elections in Korea.  Please see the list of article below. We suspect, if the conservative Saenari Party controls the National Assembly and the Presidency, after the upcoming elections, the previously promised tax reduction measures

As with the corporate tax rate, the government passed a law to decrease tax rates in Korea, however, the government has backpedaled and scrapped the law.   The taxes will increase for individuals with adjusted gross incomes over KRW 88mil/year. 2012 TAX BRACKETS                            TAX RATES                 KRW 12mil or Less                           6.6%KRW 12mil to KRW 46mil               16.5%KRW 46mil to KRW 88mil               26.4%KRW 88mil to KRW 300mil             38.5%OVER KRW 300mil      

The Korean government passed a law to decrease the corporate tax rate in Korea, however, the government has backpedaled and has increased the corporate tax rate for companies with earnings over KRW 20bil through a recent amendment to the Korean corporate tax law.  We receive many requests from clients to compare the corporate taxes, general investment environment, and benefits in doing business in free trade zones in Asian countries in

The ruling party in Korea, because of recent popularity in bashing the “rich,” has proposed a new tax on capital gains on stocks.  Many of us that assist investment companies in Korea are very afraid that the growing radical liberal minority in Korean society will, through its efforts to gain the presidency, scare away foreigners from the Korean market. Luckily, the government is much more “cautious.” “I am cautious about

Some bad news for the Korean bond market.  A law passed in 2011 entitled the Special Tax Treatment Control Law of Korea makes, for many investors, the Korea bond market much less attractive when compared to the bond market of regional rivals. Non-Korean currency denominated bonds issued in 2012 will no longer receive tax exempt status in Korea if they are payable to any company with an establishment in Korea