Korean Tax Newsletter Archive

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  • Samil Commentary 2011. 12

    This issue highlights selected changes to the government's tax reform proposals for 2011 including a lower adjustment of the newly proposed middle corporate income tax bracket. It also includes:
    - MOSF’s List of Laws to be Amended in 2012
    - Korea’s Social Security Agreement with India Entered into Force in November 2011
    - VAT Base in Case of Adjustment of Tax Amount based on the Arm’s Length Price
    - Payment for Software traded on on-line Open Markets to a Non-resident Having no PE in Korea Deemed as Korean Sourced Royalty Income
    - Initial Date of Reckoning Severance Pay in case of Merger of Companies having Different Severance Pay Schemes

  • Samil Commentary 2011. 11

    - NTS Notice on Certificate of Good Standing and Tax Compliance
    - Guidance of Penalty Against non-compliance with Obligation to Submit Foreign Subsidiary Information
    - Korea to Tighten Disclosure Requirements of Inter-company Transactions in a Business Group
    - Korea, Ecuador Agree to an Income Tax Treaty
    - How to Pay Local Income Tax on the Payment of Corporate Income Tax Withheld by a Domestic Company on Behalf of a Foreign Company
    - Classification of Interest Payment Made by Parent Company for an Insolvent Subsidiary
    - Penalty for Non-Compliance with Requirement for Submitting International Transaction Information
    - Transaction Eligible for Zero-Rated VAT
    - Electronic VAT Invoice Reissued Based on Paper Invoice after the Filing Period

  • Samil Commentary 2011. 9

    - Additional changes in Tax Reform Proposals for 2011

  • Samil Commentary 2011. 9

    - Tax Reform Proposals for 2011

  • Samil Commentary 2011. 8

    - Preliminary Return and Payment no Longer Required for Capital Gain on Shares Traded on Foreign Exchanges
    - Amended Education Tax Law Clarifies How the Income Amount of Banking and Insurance Businesses is Calculated
    - Korea to Sign Tax Information Exchange Agreements with British Virgin Islands and Costa Rica
    - Korea, Peru Agree to an Income Tax Treaty
    - Supreme Court Focuses on Substance over Form in a Korean Shipping Company’s Transaction through a Paper Company
    - Zero-rate VAT not Applicable to Domestically Supplied Goods for Export business Unless it meets the documentation requirements for VAT purpose
    - Requirements for Dividend Deduction of PFV

  • Samil Commentary 2011. 6

    - Higher R&D Tax Credit for Core Technologies and Strategic Growth Industries
    - Proposed Bank Levy to be Enforced in August 2011
    - Advance Payment of Signing Bonus with Recourse Agreement
    - Barred Offset of Severance Payment against Unpaid Employee Loan
    - VAT Liability for Cybermall Transactions by Nonresident Trader
    - Tax Credit for Logistics Outsourcing Cost in a Spin-off
    - Tax Credit for Investment in Semiconductor Manufacturing Cleanroom

  • Samil Commentary 2011. 4

    - Tax credit on third party logistics expenditure
    - R&D Tax Credit vs Investment Credit for R&D Facilities
    - Coupon Discounts Excluded from Taxable Base
    - Interim Payment of Retirement Benefits
    - Non-filing of Documents establishing Zero-rate VAT
    - NTS Advance Ruling on R&D Tax Credit
    - NTS Advance Ruling on Investment Credit
    - Treatment of Retroactive Payment of Salary Increases

  • Samil Transfer Pricing Report 2011. 2

    This report highlights the latest amendments to the Law for the Coordination of International Tax Affairs, Korean tax regulations for international transactions which are generally applicable for fiscal years beginning on January 1, 2011. .Also, we are pleased to enclose the Korean edition of this publication. This report is published by Samil PricewaterhouseCoopers Transfer Pricing Practice.

  • Samil Commentary 2011. 1

  • Tax News Flash 2010. 12

    National Assembly Approves Tax Reform Proposals with a Few Changes from the MOSF Reform Package

  • Samil Commentary 2010. 11

    - Tax Incentives under FIZ Extended to Value Added Service Industries
    - NTS Selection Criteria for Tax Audit in 2010
    - NTS Advance Ruling Program to Cover All Tax Categories in 2011
    - Benefits and Requirements for Applying Horizontal Compliance
    - Rulings

  • Samil Commentary 2010. 9

    This issue includes the latest rulings issued by the National Tax Tribunal in relation to the deductibility of stock award cost reimbursement and thin capitalization Rule applicable to loan from third party on comfort letter issued by a foreign parent.

  • Tax News Flash 2010. 8

    MOSF Announces Tax Reform Proposals for 2010

  • Samil Commentary 2010. 8

    - Troublesome Transactions of Pharmaceutical Companies under Spotlight of Latest Investigation
    - Korea and Yemen Agree to Sign Income Tax Treaty
    - Rulings on fees in return for payment guarantee service, modification of finance covenants, zero-rate VAT, etc.

  • Tax News Flash 2010. 7

    Direction of Tax Law Changes upon K-IFRS Implementation

  • Samil Commentary 2010. 6

    - Taxation of Smartphone Application Transactions
    - NTT Support the Consistency in Good Faith and Sincerity Applied against Taxpayers
    - Rulings

  • Tax News Flash 2010. 4

    Deductibility on Stock Based Compensation Costs

  • Samil Commentary 2010. 4

    - Criteria for Tax Credits to Spur Job Growth in Small and Mid-size Enterprises
    - Summary of Latest Local Tax Changes
    - Local Tax Act Overhauled to Be Enforced in January 2011
    - NTS Internal Manual for Corporation Tax Administration
    - Latest Changes to Tax Audit System
    - Korea Signs Income Tax Agreements with Bahrain and Gabon
    - Rulings

  • Samil Commentary 2010. 2

    - Proposed Tax Credits for Job Growth in Small and Midsize Enterprises
    - Tax Information Exchange Agreements between Korea and Bermuda, Guernsey and Marshall Islands
    - Capital Registration Tax on Additional Capital Investment by FIE
    - Income Tax Treaties between Korea and Iran, and Latvia
    - Simplified Financial Reporting Standard for Non-Listed Entities
    - NTS Work Plan for 2010
    - Rulings

  • Samil Commentary 2010. 1 - Update on Consolidated Tax Return Regime

    This issue highlights the overview of the consolidated tax return (CTR) regime to be rolled out from the fiscal year 2010 and the latest change to related regulations at the end of December 2009. This publication is issued by Tax LoS CTR TFT.

  • Tax News Flash 2009. 12

    One-year grace period for electronic VAT invocing

  • Samil Commentary 2009. 12 - Korean Tax Law Changes for 2010

    On December 23, 2009, the Strategy and Finance Committee of the National Assembly approved the government's tax reform proposal for 2010 with some revisions, which included a two-year delay on reduction in highest corporate and individual income tax rates, higher R&D tax credit for certain industries and three major changes to stimulate corporate restructuring.
    - Rulings

  • Tax News Flash 2009. 11
    It has been over 10 years since the discussion for the amendment of the Korea-US tax treaty was initiated by both governments.
    This issues includes the latest developments in discussions to revise the Korea-US tax treaty which are covered by media reports.

  • Samil Commentary 2009. 10

    - NTS Introduces Horizontal Compliance Program
    - Local Consumption Tax to Replace 5% of VAT
    - Budget Plan for 2010 to Reduce Corporation Tax
    - Number of Tax Audits in 2008 at Record Low for Five Past Years
    - Rulings

  • Tax News Flash 2009. 09

    Guideline for 2009 Tax Audit Administration

  • Tax News Flash 2009. 09

    Tax Reform Proposals for 2010

  • Samil Commentary 2009. 09

    This month issue of Samil Commentary includes additionally selected tax reform proposals for 2010, in subsequent to proposed reforms highlighted by the Tax News Flash, including tax incentives to support research & development and green energy investment; and proposals to stimulate corporate restructuring and to reduce tax benefits for large corporations.

  • Samil Commentary 2009. 08

    - Rules Amended to Expand Foreign Direct Investment Incentives
    - Korea to Reform Bonded Factory Regime
    - Plan to Enhance the Predictability of Tax Audits
    - Electronic Local Tax Payment Launched in August
    - Local Tax Payment System to Be Overhauled

  • Samil Commentary 2009. 07

    - Tax Incentives to Facilitate R&D and Green Energy Investment
    - Online Filing of Business Closure or Suspension
    - Rulings
    - Formation of a Company for Registration Tax Purpose
    - Limit of Deductible Severance Pay for Officers
    - Taxable Income of Internet Shopping Mall Operator
    - Allocation of Common Input Tax

  • Samil Commentary 2009. 06

    - Tax Incentives to Promote Job Sharing:
    - Tax incentives for corporate restructuring
    - Tax Credit on Investment in Certain Industries
    - Qualified Foreign Intermediary for Withholding Tax Exemption for Foreign Investment in Government Bonds
    - Government Programs to Support Shifts
    - Rulings
    Payment in Korean Won made by a Non-resident’s Free Korean Won Account
    Classification of Income Arising from Sale of Shares through Investment in Offshore Fund

  • Samil Commentary 2009. 05

    - Latest update on tax law changes including new requirements for deductible stock option expense
    - Amendments to qualifications for small and midsized company that including two additional criteria for graduation from SME
    - Korea Joins Joint International Tax Shelter Information Center as part of the effort to deter abusive cross-border tax evasion schemes
    - Rulings on the evaluation of PE for a foreign technical advisor’s assignment to Korea, etc.

  • Samil Commentary 2009. 03

    This issues includes a summary of proposed tax changes to facilitate the economic recovery
    which the Ministry of Strategy and Finance announced this March. The proposed changes will
    become effective following the approval by the National Assembly in its temporary session to be held in April 2009.

  • Samil Commentary - Korean Tax Law Changes for 2009(2)

    In the wake of the amendments to the tax laws announced at the end of December 2008,
    this issues highlights some of the important changes to the following tax enforcement decrees:
    - Corporate Income Tax Rules
    - Transfer Pricing and Thin Capitalization Rules
    - Tax Incentive Rules
    - Education Tax Rules
    - Others

  • Samil Commentary - Korean Tax Law Changes for 2009

    Samil PwC's periodic guide to developments in Korean tax laws, rulings and fiscal policies.
    This issues highlights selected significant amendments to the Corporate Income Tax Law and
    other Korean tax laws which have passed the National Assembly in December 2008.
  • Samil Commentary 2008.12

    - Proposed Underreporting Penalty Relief through Contemporaneous TP Documentation
    - Proposed Changes to Criteria for Small and Medium-Sized Enterprises
    - Korea-Kyrgyzstan Sign an Income Tax Treaty
    - Ruling on Transaction Qualified for Zero Rate VAT

  • Samil Commentary 2008.10

    - Latest Changes in Tax Incentive Rules
    - Retained Tax Benefit for Project Financing Vehicle
    - Korea-Australia Social Security Agreement
    - Local Tax Regime Reform Plan
    - NTS Advance Ruling Program
    - Ruling on Time of Supply
    - Ruling on Exemption from Acquisition Tax in Consecutive Spin-offs
    - Ruling on Equity Linked Warrants

  • Samil Commentary 2008.09

    Korean Tax Reform Proposals for 2008
    The Korean government has announced a package of proposed changes to tax laws including reductions in corporate and individual income tax rates, withholding tax on interest and dividends paid to nonresidents and foreign corporations, and branch tax on foreign corporations.
    If the proposed changes are approved by the National Assembly in December, most of the proposed changes would become effective starting January 1, 2009 unless otherwise be specified.
    This issue provides a brief summary of significant changes contained in the reform package released by the Ministry of Strategy and Finance.

  • Samil Commentary 2008.07

    - Special Withholding Tax Regime for Payment to Non-resident US Entertainment Companies
    - Public Forum on the Proposed Consolidated Tax Return System
    - Latest Guide on NTS Tax Audit Procedures
    - ETIC Payments Due and Requirements for Statement of Payments to Temporary Workers
    - Tax incentives for Foreign Investment in Bio Technology and Materials
    - Sales as a Basis to Calculate Entertainment Expense Deduction Limits

  • Samil Commentary 2008.06

    - Proposed Reduction in Corporate Income Tax Rates
    - Korea-Latvia Agreement on Income Tax Treaty
    - Expansion of Ceiling on Joint Cash Management Overseas
    - Liberalization of Investment in Overseas Real Property
    - Treatment of Considerations for the Use of Unregistered Patents
    - Treatment of the Issuance of Exchangeable Bonds

  • Samil Commentary 2008.05.28

    - Taxpayer Protection Committee of NTS
    - NTS Plan to Reform Tax Audit Procedures
    - Tax Incentivies for Foreign Investment in FEZ
    - New Programs to Relieve Taxpayers' Burden of Proof in Appeal Proceedings
    - Korea-Kyrgyzstan's Talks about Income Tax Treaty
    - Depreciation Limit for Assets Acquired by a New Company in a Spin Off
    - Post-Merger Tax Reduction Ratio for Eligible FIE
    - Income Recognition of Deemed Dividends

  • Samil Commentary 2008.04.21

    - Proposed Changes to Enforcement Rules
    - Resident Surtax Filing and Payment Procedures
    - National Tax and Local Tax Portals
    - Overhaul of Tax Incentives in Korea
    - Treatment of Distributable Retained Earnings under CFC Rules
    - Tax Credit for Research and Manpower Development Expenditure under Risk Sharing Agreement
    - Treatment of Conversion Gain derived by a Foreign Corporation

  • Samil Commentary 2008.03.17

    - Extension of Temporary Investment Tax Credit
    - Rules for Land Purchase by Foreign Corporations
    - Latest Notice on Tax Havens
    - Corporate Income Tax Rate Cut Suggested
    - Korea’s single administrative tax court
    - Consolidated tax return to be introduced
    - Advance Ruling Procedures considered
    - Ruling on the Treatment of Signing Bonus

  • Samil Commentary 2008.02.11

    Changes to Korean Tax Laws for 2008 (2)
    This is the second series of Korean tax law changes for 2008, following the coverage of significant changes to Korean tax laws which have mostly become effective from January 2008.
    This issue includes proposed amendments to the enforcement decrees of tax laws with a focus on changes to deregulate business management and rules for tax exemption or reduction.

  • Samil Commentary 2008.01.11

    Changes to Korean Tax Laws for 2008 (1)
    The National Assembly approved amendments to the Corporate Income Tax Law and other tax laws, most of which have become effective from January 1.2008.
    The amended tax laws offer new tax credits to promote the development of logistics outsourcing and overseas natural resources exploration businesses. They also outline the partnership taxation which is to be enforced beginning in January, 2009.
  • Samil Commentary 2007.11.23
    - Korea-Lithuania Income Tax Treaty
    - Measures for Liberalizing Foreign Exchange Transactions
    - Supreme Court's Ruling on Stock Options
    - Ruling on Penalty in a Comprehensive Business Transfer under VAT Law

  • Samil Commentary 2007.10.31
    - Amended Enforcement Rules of the Foreign investment Promotion Act
    - Simplified Procedures for the Establishment and Operations of REITs
    - Unified code system for four social security payments
    - Revised notice on Tax reconciliation statement filing

  • A summary of Korean corporate and individual income taxes 2007
    A brief overview of Koren corporate and individual income taxes as of February 2007
    - Corporate income tax summaries
    - Individual income tax summaries

  • Samil Commentary 2007.10.09
    MOFE’s Proposed Rules for Partnership Taxation
    The Ministry of Finance and Economy (MOFE) has submitted a draft bill to revise Special Tax Treatment Control Law (STTCL) to the National Assembly in early October. And the new bill includes new provisions on the long awaited partnership taxation. If approved by the National Assembly by the end of December, the proposed partnership rule will become effective from fiscal years beginning on or after January 1, 2009.

  • Samil Commentary 2007.08.31
    MOFE’s Tax Reform Proposal for 2008
    The Ministry of Finance and Economy (MOFE) announced its tax reform proposal for 2008.
    Among the items Included in the proposal are clarification of the substance over form rule intended to prevent tax avoidance, expansion of tax incentives for research and development (R&D) expenditure, increased tax relief for incorporation or relocation in specific areas and amendment of the thin capitalization rule for the financial services industry.

  • Samil Commentary 2007.07.30
    - NTS Appeal Committee Pool Introduced to Expedite Proceedings in July 2007
    - Latest Developments in Local Tax Act
    - NTS Audit Directive for 2007
    - Korea-Lighania Income Tax Treaty
    - Korea-Thailand Income Tax Treaty
    - Tax Exemption Denied for Income from Diversified Business after Factory Relocation

  • Samil Commentary 2007.06.28
    - Amended VAT Law on Direct Online Marketers
    - Move toward a Simplified Approach to APA with China, Vietnam and India
    - Public Forum on New Partnership Taxation
    - Korea and Kuwait Agree to Amend and Income Tax Treaty
    - MOFE Ruling on Tax Exemption for Head Office or Factory Relocation
    - Accelerated Depreciation after a Spin-off

  • Samil Commentary 2007.04.30
    - Opportunity to Apply for Early Payment of Tax Assessment Amount
    - Advance Customs Valuation Agreement Proposed
    - Domestic Fund Distributions in respect of Foreign Stock Investment
    - Indirect Foreign Tax Credit for Dividends Received from a Chinese Subsidiary
    - Denial of Unfair Trade Rule for Share Transfers
    - Ruling in Keeping with the Substance over Form Fule

  • Samil Commentary 2007.03.16
    - Pre-deliberations Perusal as New Tax Appeals Procedure
    - Grace Period for Companies Whose SMC Status Changes Is Retained for Taxation Purposes
    - Tax Incentives in case of 100% Share Transfer of an Original Foreign Investor

  • Samil Commentary 2007.02.16
    2007 Korean Tax Law Changes
    This is a brief summary of amendments to Korean tax laws, including the Corporate Income Tax Law (CITL), the Individual Income Tax Law(IITL), the Special Tax Treatment Control Law(STTCL) and the Value Added Tax Law(VATL) that were approved by Korea's Nationa Assembly at the end of December 2006. Most of these changes are generally effective from January 1, 2007 unless otherwise specified.
    The summary also includes proposed amendments to the Presidential Enforcement Decree of these laws which are to be finalized. The changes should not generally be acted upon without first obtaining appropriate professional advice.

  • Samil Commentary 2007.01.26
    - Korea Designates Five Foreign Jurisdictions as Tax Havens
    - Revisions to the Korea-Canada Tax Treaty
    - Korea-Albania Tax Treaty Comes into Force
    - MOFE's Plans for Taxation Policies in 2007
    - Support for Small and Midsize Companies to Promote Job Creation
    - Treatment of Tax Paid by a Domestic Company under US Partnership Taxation
    - Treatment of the Payment of Common Expenses Made in Cash