Grievance: According to the Restriction of Special Taxation Act, foreign-invested companies that have moved into complex-type foreign investment zone are subject to reduction or exemption of tax for five years while foreign-invested companies with high-technology are given seven years for tax reduction or exemption.

Foreign-invested company A is subject to tax reduction or exemption for satisfying two conditions: the company moved into complex-type foreign investment zone in region B, and is acknowledged as a foreign-invested company with high-technology by MOTIE due to its production of glass substrate as thin as 0.4㎜ or less.

However, according to the rule established by MOSF (Sep 18, 2012, No. 452), even in the case where numerous foreign investments are made in the same place of business, only one case of tax reduction or exemption is allowed per business.

Therefore, the Office of Foreign Investment Ombudsman (OFIO) pointed out the unreasonableness of the rule to MOSF and MOTIE, and requested the revision of the Restriction of Special Taxation Act to allow tax reduction or exemption for each business if separate bookeeping is available for products thinner and thicker than 0.4㎜.

Result: A provision prescribing that 『If separate bookeeping is available in the same place of business, each business will be subject to tax reduction or exemption』 was newly inserted to Article 121-2(18) of the Restriction of Special Taxation Act on Dec 23, 2014 (enforced on Jan 1, 2015).