A Quick Glance At The Requirements For Claiming Tax Benefits In Korea

Foreign companies that are beneficial owners of Korean-sourced income must now submit

an application to their withholding agents before they receive any income, in order to claim any tax treaty benefits. The new application requirements, prescribed under the revised Corporate Income Tax Law (CITL), are applicable with regard to tax withheld on or after July 1, 2012.

Korea - Claiming Tax Treaty Benefits - Key Highlights:

The beneficial owners of Korean-source income and those who want to claim a reduced tax treaty rate are now required to submit an application form (to be defined in the presidential decree of the CITL) to the withholding agent prior to the income is paid. In cases where the beneficial owners receive income (Korean-Source income) via an offshore investment vehicle, the offshore entity must obtain the application form from beneficial owners.

The offshore investment vehicle must also submit a report on the offshore investment vehicle with a comprehensive schedule of beneficial owners. In situations where the withholding agent does not receive an application form or the complete report from the offshore investment vehicle, or is unable to verify the beneficial owner based on the information provided, it applies the Korean domestic withholding tax rate.

If the beneficial owner does not claim a reduced tax treaty rate at the time of withholding, it has three years from the end of the month in which the tax was deducted, to claim a refund.

Expert Assistance in your overseas business venture

In any international business expansion, businesses need the knowledge of local regulations and laws. Incomplete knowledge about foreign markets can be a real impediment to your business venture. Ignoring tax implications or leaving it up to local subsidiaries to address the problem may leave companies open to financial risks and or even put the companys reputation at stake. Teaming up with an expert will help fill gaps and provide necessary assistance in the complexities of taxation and take the anxiety out of your overseas expansion, thereby allowing you to focus on building your business.

Acquiring services of a business consultant can minimize risks and maximize your chances of success. You can get valuable assistance in almost all areas of your business like sas compliance, international accounting, global transfer pricing, etc.

by: brianwarren

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