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Korean firms to be eligible for tax benefits when selling overseas assets

Collected: 2016.07.19

Distributed: 2016.07.20

Source: Go Direct

South Korean companies will receive tax benefits when selling stakes in overseas companies in new government measure to encourage necessary streamlining in Korean offshore operations. The move also can help inshoring, move of overseas operating to the local economy.

The tax revision will be included in the proposal for tax code revision slated for later in the month.

M&A transaction involves various levies for asset purchase and transfer and stock transaction which could be burdensome for the concerning parties. Taxes can be put off or deducted if merger meets a certain level of criteria. Such benefits that had been exclusive for enterprises in Korea will also be extended to the case Korean companies sells off their assets and equity in enterprises incorporated in other countries.

The criteria to be eligible for the tax benefits also would be eased. The industry is proposing the guidelines for time and ratio of stake-holding after merger or acquisition be eased or scrapped.

By Lee Seung-yoon

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