31 12 2018
Zero-rated VAT in Korea
The October 2018 newsletter touched on the general aspects of the Value Added Tax (“VAT”) regime in Korea, covering such topics as the VAT taxpayer, taxable transactions, VAT base, calculation of the VAT, and filing and payments of the VAT, etc. This month’s newsletter will explore the key contents of the “zero-rated VAT” system in Korea, which is highly relevant to the foreign invested companies doing business in Korea.
30 11 2018
Following an amendment to the Labor Standards Act (hereinafter the “Act”) which came into effect in May 2018, employees with less than a year of service and employees who go on maternity leave can now benefit from an extended entitlement to paid leave.
The amended Act has strengthened the past Act where paid leave for employees with less than two years of service was insufficient and maternity leave was not accounted for when determining the duration of employee service.
31 10 2018
In the April 2018 newsletter, we looked at the major topics covered in the proposed amendment to the Enforcement Decree of the Act on External Audit of Joint Stock Companies (hereinafter the “Enforcement Decree”). The proposed amendment has recently been passed in the national assembly and promulgated to take effect from November 1st, 2018. The amended Enforcement Decree will extend the scope of companies subject to external audit to limited companies (also known as “Yuhan Hoesa”) and set forth revised external audit requirements to determine which companies would be subject to external audit.
31 10 2018
Korea has entered into tax treaties(also called double tax agreements) with many countries around the world to avoid double taxation, prevent tax evasion and promote international trade. Since the first tax treaty was signed in 1970, Korea has entered into tax treaties with 93 countries until now.
Moreover, there have been a lot of changes in the content and format of the tax treaty including the recent signing of the multilateral convention to implement tax treaty related measures to prevent BEPS. We are going to briefly look at the characteristics of the tax treaty in Korea and the status of the tax treaties that Korea has entered into with various countries.
30 09 2018
In the last month’s newsletter, we touched on the Accounting Supervision regime set out under the Act on External Audit of Joint Stock Companies and other relevant statutory regulations and guidelines. As a continuation from last month, we are going to briefly explore the “Theme Review” regime introduced in 2014 by the financial supervisory authority in Korea, as well as the recent areas of interest of the Theme Review.
30 09 2018
Just as Corporate Income Tax and Personal Income Tax are important aspects to consider when doing business in Korea, VAT is another vital component that foreigners should be acquainted with. In this month’s newsletter, we are going to briefly look at the overall contents of VAT in Korea such as the taxpayers, taxable objects, VAT exemption, zero-rated VAT, tax rates, VAT returns and payment, etc.
31 08 2018
As we set out in our newsletter in February “Holiday and Leaves in Korea”, holidays and leaves are critical as employees deserve their rightful rest and the basic necessities as human beings. Further, the Labor Standards Act of Korea stipulates working hours of employees with a view to reducing the longest working hours among OECD countries and improving labour productivity.
31 08 2018
Whether it be a corporate activity or everyday life, a taxpayer may face tax uncertainties from time to time. To help the taxpayers with their tax issues, the Korean tax authority has implemented a tax inquiry system, which can be divided into two categories: 1) Written Inquiry and 2) Advance Ruling. This month’s newsletter will briefly go over these two types of inquiry system available to the taxpayers in Korea.
31 07 2018
The transfer of shares in an unlisted Korean company by a foreign corporate shareholder without a permanent establishment (“PE”) in Korea often occurs in the Korean business environment. In this month’s newsletter, we will look at Korean tax implications arising from the transfer of shares described above.
30 06 2018
The financial regulatory authority in Korea conducts accounting supervision of the companies subject to independent external audit under the Act on External Audit of Joint Stock Companies to verify whether proper accounting treatments and audit procedures have been performed. The accounting supervision regime seeks to examine whether applicable accounting and auditing standards have been followed, and if any violations of the standards have occurred, sanctions are put in place against the party responsible for the violations. The Accounting Supervision regime will improve the integrity of the accounting information, and contribute to the protection of the stakeholders and sound business development of the companies.
The Accounting Supervision can be broadly classified into 1) Audit Review of companies subject to external audit and 2) Quality Control Inspection of the independent auditors. In this issue of the newsletter, we will briefly look at the major procedures involved in the Audit Review of companies subject to external audit.