South Korean Lawmakers Approve Tax On Foreign Investors
The South Korean parliament has approved a new measure which aims to prevent
offshore-based foreign firms from avoiding taxes on income made in the country. Under a proposal approved by the National Assembly on Tuesday and due to come
into effect in July, a withholding tax will be imposed on the South Korean gains
made by investors based offshore under certain conditions, such as when the
company has owned shares in a domestic firm for more than six months. Foreign investors will then be able to apply for refunds, if eligible under
South Korean law. The move comes amid a national outcry at the huge tax-free profits being made
by certain foreign companies which snapped up distressed assets on the cheap
in the aftermath of the Asian finacial crisis in the late 1990s. "The revision is to prevent tax evasion in international deals by clearly
stating that taxes will be imposed on actual profit earners in international
transactions," a parliamentary statement explained. "The revision will help reduce tax evasion in international deals by improving
transparency in taxation," it added. .
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