The MOFE has designated Labuan in Malaysia as the first foreign jurisdiction to which the new withholding tax rule applies. According to the new rule, foreign investors in a designated foreign jurisdiction are subject to Korean withholding tax rates rather than reduced rates under a treaty on their Korean source income such as dividend, interest, royalties and capital gains.
Ⅱ. Amendments to Law for Taxation of International Transactions
Korea's National Assembly has finally approved a prolonged revision of the Law for Coordination of International Tax Affairs (LCITA) that include the codification of substance over form rule into the LCITA, improvements to transfer pricing rules and amendments to anti-tax haven rules.
Ⅲ. Korea , Albania Sign an Income Tax Treaty
Korea and Albania signed an agreement to avoid double taxation and tax evasion of income in Seoul on May 17, 2006. The agreement is subject to the ratification by both governments before coming into force.
Ⅳ. Rulings
Classification of employee earned income
Classification of leasing in the VAT context
Characterization of certain payment in a merger between controlling and controlled companies
Tax exemption for factory relocation by small and midsize enterprise Social tax contributions not credited against income tax payable
Characterization of phantom stock gain Classification of income from repairing and maintenance service by a manufacturing company
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