Korea: Tax reform proposal for 2023, implications for foreign invested companies
Highlights of the tax reform proposal that may have a potential effect on foreign invested companies
Implications for foreign invested companies
The Ministry of Economy and Finance (MOEF) on 27 July 2023 announced the tax reform proposal for 2023 that focuses on boosting the economy, supporting recovery of public welfare, and preparing for future advancement.
Major highlights of the tax reform proposal that may have a potential effect on foreign invested companies include:
- Expansion of scope of strategic technology and new growth engine source technology
- Extension of tax exemption period for foreign engineers and expansion of scope
- Extension for application period of flat income tax rate to foreign employees
- Extension of tax reduction application period for special regions
- Expansion of exemption for Foreign Bank and Financial Accounts (FBAR) reporting obligation
- Limit for penalties for late issuance of invoices
- Establishment of regular implementation committee for tax treaties
- Penalties for non-registered electronic service providers subject to simplified value added tax (VAT) registration
- Introduction of reporting requirements for foreign stock-based compensation
Read an August 2023 report [PDF 376 KB] prepared by the KPMG member firm in Korea that examines these topics in more detail.
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