ey-global-tax-policy-outlook-for-2015

South Korea
2.6 Political landscape
• There are no major changes from 2014.
2.7 Current tax policy and tax administration
leaders
Tax policy leader
•
Tax administration leader
• Commissioner Lim Hwan-soo , National Tax Service
2.8 Key tax policy changes in 2014
•
tax reform proposal originally made on 1 August 2013,
incentives regime. These changes, included in the Tax
Incentives Limitation Law, are outlined below and are all
effective as of 1 January 2014.
• Deductibility of R&D reserve: Under the previous tax
was permitted to be deducted for corporate income tax
purposes. Under the new law, these reserves are no
longer deductible. Amounts that were accrued prior to 31
• Changes in R&D investment tax credit: Under the new
law, the previous credit of 10% on the cost of developing
enterprises) and large companies has been decreased
to 5% for medium-sized companies and 3% for large
companies. The 10% credit remains for small companies.
• Changes in R&D tax credit: To limit large companies
taxpayers equals the greater of: (i) 40% of current year
prior years’ (two prior years for 2014 and a prior year for
the current year multiplied by 3% plus an additional rate
Under the previous law, this limitation was limited to 6%.
2.9 Country position on OECD Base Erosion
and Prot Shifting (BEPS) Action Plan
•
seriously as it sees some domestic and foreign entities
paying a lesser amount of taxes than they should have paid
through foreign related-party transactions.
•
a transfer pricing regime, controlled foreign corporation
(CFC) rules, thin capitalization rules and many other rules
in order to secure tax revenues from foreign related-party
transactions.
•
opinions on any particular elements of the Plan.
•
that it has assigned a team to closely monitor discussions on
• However, there have been no local developments in relation
relevant laws and regulations in line with the BEPS Action
Plan after details on each of the action items are agreed.
• Transfer pricing-related action plans, including management
service fees and royalties, may be of greatest interest to the
2.10 Pending tax proposals
• None
2.11 Consultations opened/closed
•
21 November 2014.
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