Taxation

HOME HOME Resolved Cases Taxation

Ten areas (tax, investment procedure, labor, law, etc) of grievance cases are introduced.

Labor

Title
System improvement regarding implementation period of investment objectives of foreign-invested companies that are subject to tax breaks
info
Organization Ministry of Trade, Industry and Energy (MOTIE), Ministry of Strategy and Finance (MOSF) Regulation Enforcement Decree of the Foreign Investment Promotion Act, Restriction of Special Taxation Act



Grievance
Grievance
Grievance: In accordance with Article 25 and 26-2 of Enforcement Decree of the Foreign Investment Promotion Act, a foreign-invested company that is designated as individual-type foreign investment zone shall complete implementation of investment objectives (foreign investment amount, etc.) within 5 years from the date of public notification, and the designated company may extend the implementation period up to one year where there exists any unavoidable reason for doing so. On the other hand, according to Article 121-5 of the Restriction of Special Taxation Act, if a foreign-invested company does not pay investment objectives within 5 years from the date of reporting foreign investment, the already reduced or exempted amount of corporate tax, customs duties, and local tax will be charged. Although foreign-invested company A obtained approval for extending implementation period to one year from the local authorities, the already reduced amount of local tax was imposed on the company according to the Restriction of Special Taxation Act.
Resolution and Results
Resolution and Results
Result: On December 23, 2014, a new provision 『If investment objectives paid within the implementation period extended by the mayor of city/do in accordance with Article 18-2 of the Foreign Investment Promotion Act satisfy the standards for tax reduction or exemption』 was added to Article 121-5(5)4 of Restriction of Special Taxation Act (enforced on January 1, 2015) for system improvement.