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  • Grievance regarding reduction of customs duties (customs duty reduction following long-term-debt-for
    • 담당부서 : 외투기업고충처리실(고상원)
    • 조회수 : 1,312
  • Organization : Ministry A
  • Regulation : Restriction of Special Taxation Act, Foreign Investment Promotion Act
Grievance
- The filing company moved into “complex-type foreign investment zone” in region A.

- In order to expand the factory, the filing company is planning to lease about 10,000 pyeong in addition to the existing factory and re-investment will require additional USD 50 million.

- Among USD 50 million, USD 10 million will be invested from the company’s capital and the company is considering to take out a long-term loan for the remaining USD 40 million.

- As for the long term loan, the filing company is reviewing to convert it into capital after a certain period. Therefore, the filing company would like to know whether the customs duties on the capital can be reduced.
Resoultion and Results
ㅇ June 17, 2015: Submission of official inquiry to Ministry A

ㅇ January 7, 2016: Received an official reply (administrative interpretation) from Ministry A

- Summary of the reply from Ministry A :

If foreign investor’s long-term loan is converted into capital in accordance with Article 2-1(4)b of the Foreign Investment Promotion Act, the converted capital is considered as “the capital goods imported by a foreign-invested enterprise within the extent of the means of foreign payment or domestic payment that has been invested by a foreign investor” under Article 116-5(3) of Enforcement Decree of the Restriction of Special Taxation Act.