Revised Presidential Decrees of Tax Laws
On February 13, 2018, the Korean government promulgated amendments to the Presidential Decrees of the Corporate Income Tax Law and the Individual Income Tax Law. The major changes are summarized as follows.
l Postponement of Expansion of Capital Gain Taxation on Non-residents and Foreign(Non-Korean) Corporations for the Transfer of Listed Stocks
In order to enhance taxation on Korean source income derived by non-residents and foreign corporations, the government previously proposed amendments to the Presidential Decrees which included expansion of capital gain taxation on non-residents and foreign corporations for the transfer of listed stocks. However, the government decided to postpone the revision and review the proposed changes again later as part of tax reform proposals for 2018.
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Current |
Initially Proposed |
Revised |
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¨ Scope of capital gain taxation on non-residents and foreign corporations
¡ Unlisted stocks : taxable
¡ Listed stocks
- traded OTC : taxable
- traded in the securities market : taxable if traded by majority shareholders
* scope of majority shareholders : shareholders who own at least 25% of the outstanding shares of the corporation |
¨ Scope expansion of capital gain taxation on non-residents and foreign corporations
¡ Unlisted stocks : taxable
¡ Listed stocks
- traded OTC : taxable
- traded in the securities market : taxable if traded by majority shareholders
* scope of majority shareholders : shareholders who own at least 5% of the outstanding shares of the corporation
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The government decided to postpone the revision. The government will review the revision with the improvement of the withholding tax system. |