□ (Background) As a revision on the Restriction of Special Taxation Act, which includes a cutback on incentives for foreign investors, was preliminarily announced as of August 9, 2013, foreign– invested companies raised grievances regarding reduced tax benefits thereof.

□ (Main Issue) The changes on a flat income tax rate could potentially have a huge impact on foreign workers and employees dispatched from head offices, so many foreign companies asked the Ombudsman to resolve the grievance.

□ (Resolution Process)
▶ Listened to the MOSF’s position by visiting relevant organizations
- (Sept. 26, 2013) Meeting with the Income Tax Division of the MOSF
- (Oct.17, 2013) Delivery of e-mail and official document to the Chairman and members of the Strategy and Finance Committee of the National Assembly
- (Dec. 11, 2013) Delivery of e-mail to executive consultants and legislative researcher of the Tax Subcommittee of the Strategy and Finance Committee
- (Jan. 14, 2014) Consult with the Ministry of Government Legislation on the revised Act

□ (Result) As of January 1, 2014, the revision of Restriction of Special Taxation Act was passed in the National Assembly and promulgated.
- Foreigners who started working in Korea before January 1, 2014 will be subject to the existing law and foreign-invested companies prescribed by Presidential Decree on specially related persons will be exempt from the application of the new law.