South Korea: New tax law

This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A., its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions reflected herein. The information in this Taxflash does not constitute legal or tax advice.

Further to our TaxFlash T11067, dated 24 October 2011, the Korean Ministry of Strategy and Finance (MOSF) has released the following tax forms for foreign investors who want to benefit from a reduced rate of withholding tax in accordance with a Double Taxation Treaty (DTT) between their country of residence and South Korea:

	To be completed by foreign corporations:
	a.	Application for Entitlement to Reduced Tax Rate on Domestic Source Income (Foreign Corporations)

	b.	Request for Tax Refund by Application of Reduced Tax Rate (Foreign Corporations)

	To be completed by non-resident individuals:
	c.	Application for Entitlement to Reduced Tax Rate on Domestic Source Income (Non-Resident Individuals)

	d.	Request for Tax Refund by Application of Reduced Tax Rate (Non-Resident Individuals)

	To be completed by Overseas Investment Vehicles (OIVs):
	e.	Report of Overseas Investment Vehicle (Form 29-13)

	f.	Annex to Form 29-13 (Schedule of Beneficial Owners)

For tax reclaims in relation to OIVs, beneficial owners will be permitted to proceed with the reclaim according to whether the foreign investor is a corporation or an individual, in which case they must also complete form (b) or form (d) respectively.

These new requirements will be applied for interest and dividend income to be paid on or after 1 July 2012.

For foreign investors who want to apply for the default tax, no forms will need to be completed.

We will continue to monitor the progress of the proposal for new developments and will provide more information as it becomes available.

South Korea: New tax law - update