South Korea accelerates non-resident exemption for taxes on bonds

In July 2022, the South Korean Ministry of Economy and Finance announced the 2022 tax reform proposals (the “2022 Proposals”). The 2002 Proposals reintroduce the tax exemption on interest and capital gains earned by foreign individual and corporate investors from South Korean government bonds and monetary stabilisation bonds with the intention to make such bonds more attractive to foreign investors. This relief is available for both direct investments and indirect investments through qualified foreign financial institutions. The exemption was due to enter effect from 1 January 2023 however, at the G-20 finance ministers meeting on 15 October 2022, the Finance Minister Choo Kyung-ho stated that the government will move forward the effective date of the exemption to be effective from 17 October 2022.

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