Qualification for Tax Incentives
Provided in Article 121 (2) of 「Restriction of Special Taxation Act」, a foreign investment to run any business, which meets the standards prescribed by Presidential Decree, is eligible for the reduction of or exemption from the corporate tax, income tax, acquisition tax, and property tax.
A foreign-invested company that acquires existing stocks or long-term loans with 5 years disqualifies for the reduction of or exemption from the corporate tax, income tax, acquisition tax, and property tax.
Furthermore, if stocks acquired by a foreigner who intends to make an investment are issued by a foreign corporation or owned by a foreigner under 「Foreign Exchange Transactions Act」 it is impossible to receive the reduction of or exemption from the corporate tax, income tax, acquisition tax, and property tax.
Source : 「Restriction of Special Taxation Act」; 「Foreign Exchange Transactions Act」. www.law.go.kr
Application for Tax Incentives
01 Investment Notification
A prior investment notification of a foreign investor who acquire newly issued shares
02 Request for Confirmation
Request to confirm the eligibility of a business for tax reduction or exemption
03 Filing of an Application
Filing of an application for tax reductions or exemptions
04 Decision on the Eligibility
Decision on the eligibility of a business for tax reduction or exemption
Notification of tax incentives to the relevant applicant
Tax Support related to Real Estate
Acquisition tax, registration tax, property tax, and composite land tax on the property acquired and held by a foreign-invested company to run a reported business shall be reduced, with an exemption from the total of the amount of tax for five years from the date of the starting of its business, and an amount of tax equivalent to 50 percent of the amount of tax for two years thereafter while a local government extends the period of reduction, exemption, or deduction up to 15 years, or increases the rate of reduction, exemption or deduction within the extended period.
A foreign-invested company that have the building permit or real estate registered to run a reported business is exempt from the obligation to purchase national housing bonds.
A foreign investor who receives tax incentives prescribed in the Restriction of Special Taxation Act shall get an exemption from the purchase of the total of the amount of national housing bonds, while the purchase requirement of other foreign investor shall be reduced according to its foreign investment ratio.
Source : 「Restriction of Special Taxation Act」; 「Enforcement Rule of the Housing Act」.www.law.go.kr