Korea

Details

  • Type: KPMG information, Press release
  • Date: 11/10/2011

Tax Brief 2011 October 

2011-10-Tax-Brief
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I. Tax Trend

 

2011 tax law amendment announcement by Ministry of Strategy and Finance:
Withdrawal of proposed corporate/individual income tax rate reduction
Inheritance and Gift Tax on Intra-Group Transactions (Wealth Transfer)
Taxation on Foreign Currency Denominated Bond and New Type of Financial Products
NTS: ‘closer examination’ of corporations which have over-credited foreign tax credit


II. Recent tax court cases and rulings


(1) Special calculation of tax bases of corporations reporting the financial statements in a functional currency (Bubin-663, 2011.09.08)
(2) The period of recognizing interest payments on Hybrid capital instruments (Bubin-636, 2011.08.31)
(3) VAT obligation of a corporation running a specialized credit financial business (Buga-1015, 2011.08.30)

 

III. Tax Topic


Major tax issues from the adoption of IFRS
(1) Revision of lease classification under the Corporate Income Tax Act (CITA) (Article 24 of the Presidential Decree (“PD”) of CITA)
(2) Inclusion of interest on the general borrowing into the capitalization of construction interest costs (Article 28 of the CITA and Article 52 of the corresponding PD of CITA)
(3) Deduction for contingency and responsibility reserves (Article 30 of the CITA)
a) Tax deduction for contingency reserve is to be allowed as a tax adjustment item (Article 30 of the CITA and Article 57 of the corresponding PD of CITA)