Korea: Foreign income calculation, research tax credit | KPMG Global
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Korea: Foreign income calculation, research tax credit, trustee’s VAT liability

Korea: Foreign income calculation, research tax credit

The KPMG member firm in South Korea has prepared a report that collects news of recent tax developments, including summaries of decisions of the Supreme Court.


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The topics discussed in this report are:

  • Foreign tax included in gross income for purposes of calculating a corporate tax base, by selecting the tax credit method under the corporate income tax law, cannot be deducted from the tax base of the local income tax. 
  • Korea’s tax service revised administrative rules concerning international taxation, and accordingly reflected measures associated with the implementation of automatic exchange of financial information. 
  • A decision of Korea’s Supreme Court concludes that a premium of the pension plan paid by the taxpayer comes under personnel expenses that are eligible for the research / human resources development tax credit.
  • A decision of the Supreme Court provides that if a trustee supplies goods while managing or disposing of trust assets transferred from a trustor, the trustee himself or herself then is a contracting party and as such, a party to the rights and obligations of trust assets. Accordingly, the value added tax (VAT) is the liability of the trustee transferring the right to use and consume the goods. 
  • Korea is a party to the instrument under the base erosion and profit shifting (BEPS) project (that is, the multilateral agreement to prevent tax avoidance of multinational corporations or the MLI). 


Read a July 2017 report [PDF 644 KB] prepared by the KPMG member firm in South Korea

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