(Background and grievance)

Company D needed reinvestment to expand its facilities converting raw materials.

Yet, it was expected that the reinvestment would decrease the current benefit for corporate tax, so the company asked whether there are other incentives to offset the expected loss. 

(Resolution)

OFIO's home doctor examined articles of the Restriction of Special Taxation Act, with regard to D's investment plan and concerns.

It was confirmed that, according to the Act, where the foreign-invested company alters the details of the business subject to a decision on tax benefit, and intends to obtain a tax cut for the altered business, it shall file an application for altering the details of tax reductions/exemptions within two years from the date that the relevant alteration arises. 

MOEF also clarified that altering the details for capital increase of the business not separating the account is recognized as a share capital of the investor. 

(Result)

The home doctor had a meeting with Company D to share examination and MOEF response, and recommended to carry out reinvestment without worries over tax relief.