The South Korean Ministry of Strategy and Finance announced tax reform proposals on August 6, 2015 which will take effect in 2016.
The key corporate tax proposals included in the government’s bill that South Korean inbound investors should be aware of include:
- The introduction of a ceiling on the amount of carried forward tax losses that can be offset against taxable profits in a year.
- Changes to the calculation of the amount of foreign direct investment tax incentives that can be enjoyed by qualifying foreign invested companies.
- The introduction of new transfer pricing reporting requirements.
- Korean capital gains tax (CGT) may be applicable when a foreign company disposes shares held in a domestic company, if the domestic company is regarded as being ‘property rich’.
Author: EMILIO MENEGHELLA