Korea, Canada Expect a New Income Tax Treaty to Be Enforced in January 2007
Korea and Canada signed on September 5, 2006 a new convention for the Avoidance of double taxation in which withholding taxes on dividends, interests and royalties are reduced by 5 to 10 percentage points. The new income tax treaty is expected to come into force on January 1, 2007 after being ratified by both governments.
Foreign Investment Incentives to Be extended to Nonprofit Corporations
The Korean government plans to revise foreign investment-related regulations to extend the existing tax and other incentives for foreign direct investment even in case where foreign investors or organizations establish nonprofit research entities in Korea. the existing investment incentives are presently limited to profit-generating foreign-invested entities.
Rulings
Eligibility of foreign tax credit on taxes paid by a domestic company's foreign branch office in the foreign jurisdiction.
Taxation on salary income of individuals with Korean nationality who are permanent residents in a foreign country.
Industrial classification of a domestic company of which products are built by an overseas consignment manufacturer for tax incentive purposes.
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