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  • Decision to Allow 7-year Tax Reduction in the Free Economic Zone
    • 담당부서 : 외투기업고충처리실(고상원)
    • 조회수 : 2,884
  • Organization : Free Economic Zone Committee, Ministry of Knowledge Economy
  • Regulation : administrative management
Grievance
Grievance
•Backgrounds: Company R, jointly invested by German enterprise S and Korean company T by 50-50, is now building plants to produce automobile parts in Incheon Free Economic Zone. A total of US$ 45 million of FDI is expected to be made, US$ 32 million of which has been already invested so far.

•Main Issue: The company has applied for 7-year tax reduction within the free economic zone, and the application was going to be deliberated by Free Economic Zone Committee on December 6, 2012.

•Request: To win approval of the Committee in the deliberation, the company asked for Ombudsman's assistance in submitting documents and advice

Resoultion and Results
Resolution and Results
•Resolution Process
‣(November 28, 2012) A Home Doctor visited Company R and had a meeting.
※Company R received 5-year tax reduction for its investment of US$ 23 million in 2011. As US$ 8.8. million of reinvestment was made in August 2012, the company met the requirement for a manufacturing business to get 7-year tax reduction, that is making investment of more than US$ 30 million.

To apply for it, the company had consulted with relevant ministries, but received a reply that it might be difficult to designate the company as a business subject to 7-year tax reduction. There were also a lot of information and documents to be submitted about technologies, ripple effects, and employment.

‣(December 3, 2012) A Home Doctor had a meeting with officials from Korean Free Economic Zones.
※The Home Doctor explained about the technologies Company S has, possibility of future reinvestment, and how hard the Ministry of Knowledge Economy and Incheon Free Economic Zone authorities tried to attract the company's first investment, and requested aggressive supports for the Committee's deliberation.

Outcome:
•Result: (December 6, 2012) The Free Economic Zone Committee decided to give the company 7-year tax cut.