News and developments
Selected 2024 Tax Law Amendment Proposals
The finalization of the Proposals will be subject to further deliberation and approval by the National Assembly. If approved, the Proposals will be implemented from January 1, 2025 unless otherwise specified.
Some of the key Proposals include the following.
- Extension of special tax regime for shipping enterprises (tonnage taxation) and increase of tonnage tax rate
- Tax incentives for shareholder returns (limited to a 3-year period)
- New special tax credit to promote shareholder returns
- New individual shareholders’ special taxation for dividend income paid by company with increased shareholder returns
- Exclusions from distributable profits of valuation gains arising from real estate
- Reductions to inheritance and gift and tax (“IGT”) rates
- Abolition of premium valuation of shares held by the largest shareholder for IGT purposes
- Expansion in the application of thin capitalization (“thin cap”) rule to general holding companies
- Expansion of definition of Korean tax residency for individuals
- Expansion of automatic information exchange to include crypto-assets
- Simplification of withholding tax exemption applications by non-residents and foreign companies investing in government bonds
- Simplification of the OIV application process for tax exemption
- Establishment of refund application process for non-resident individuals and foreign companies
- Simplification to Foreign Financial Account (“FFA”) reporting obligation process
- Expansion of scope of deemed donation in transactions between a controlled company and its controlling shareholder
- New compliance requirement for personal services income paid to non-resident individuals and foreign companies without a Korean PE
- Changes to reporting procedures relating to transfer price adjustments through an amended tax return
- Additional Amendments to Global Minimum Tax Rules