“Samsung’s First Family Struggles to Keep Grip on Company” Report by Bloomberg

The Samsung saga continues.  Lee Jae-Yong is likely to take over from his father soon.  It looks like Lee Kun-Hee’s health is not improving.  Bloomberg has an interesting article on this issue that may be found on the link below.   The Lee Family owns less than two percent of the total shares of Samsung Group, though they near absolutely control 74 companies “through a web of share holdings.” However,

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Weekly Korean Legal News From International Law Firm – IPG Legal for the Week of July 14, 2014

Weekly Korean Legal News From International Law Firm – IPG Legal For the Week of July 14, 2014.Korean Legal News Reported by the Media on the Week of July 14, 2014 LG outpaces Samsung in UHD TV panel market in May: data Hana Bank set for merger with KEB Economists Doubt Korea Can Return to Solid Growth Line to Be Listed on Tokyo Stock Exchange Korea ranks third in e-trade

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Witholdings Taxes on Transactions between Korean & Hong Kong Companies

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

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Foreign Account Tax Compliance Act (FACTA) in Korea

From this month, the Korea Financial Services Commission will require banks to request all to disclose if they are U.S. nationals or U.S. permanent residents when opening a bank account in Korea. Most U.S. taxpayers residing abroad must report, under U.S. law, the details of all foreign financial accounts held and controlled by the taxpayer under FACTA and also Foreign Bank and Financial Accounts (FBAR). Get the picture?  The IRS

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Weekly Korean Legal News From International Law Firm – IPG Legal for the Week of June 9, 2014

Weekly Korean Legal News From International Law Firm – IPG Legal for the week of June 9, 2014 Korean Legal News Reported by the Media on the Week of June 9, 2014 Global game makers oppose addiction bill ‘Korean firms should pay more attention to privacy’ Criminal justice in Korea: Interrogations and appointed attorneys< Criminal breach of duty (bae-im) under Korean law Law expert re-elected as judge on UN sea

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Korean Tax Laws on Entertainment Companies in Korea: Overseas Tax Deductions

Korean Tax Laws have been amended to tighten rules on exemptions for foreign and domestic companies and individuals.  I have reported on a number of this changes in this blog. One change that is having an impact on Entertainment Companies is the reduction in exemptions for companies selling movies and games overseas.  Additional information on this topic can be found at: The Korean Entertainment Law Blog. Before the amendment to

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Foreign Tax Incentives to be Cut: 17% Flat Tax Law Revised

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

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Special 20% Consumption Tax for Designer Bags Bought in Korea Suspended until 2014

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

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Free Economic Zones to Be Introduced in Korea for Foreign SMEs

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

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Korea Legal News for the Week of March 17, 2013

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

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17 Percent Flat Tax for Foreign Nationals Residing in Korea: Korean Tax Amendments for 2013

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

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Korea May Not Eat Apple’s Double Irish with a Dutch Sandwich Tax Strategy

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

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Tax Qualified Mergers in Korea: Amended 80% Rule for Triangle Mergers

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

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European Union Chamber of Commerce No Longer Doing Business in Korea by Tom Coyner

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

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U.S. Taxation of American Citizens/Permanent Residents Living Abroad

TAXES.  Everyone wants to avoid them and only a few people really know how.  This goes double for US citizens who earn income in China.  This is because the US taxes foreign income as well as income earned within the States.  Even worse, the IRS requires any US person with a financial account overseas to register it with the treasury department, as long as such account has held over $10,000USD

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Korea’s Temporary Investment Tax Credit Expired at End of 2011: R&D, Investment & FDI Credits Still Available

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

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Personal Tax Rates in Korea to Rise in 2012: Individual Income Tax Rates in Korea

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      

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Amendments to Corporate Tax Rates in Korea for 2012: Korea Corporate Tax Rates in Korea

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

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Will Korea Impose a New Capital Gains Tax on Stocks?

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

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Tax Exempt Foreign-Denominated Bonds in Korea Coming to an End for Holders with Offices in Korea

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

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