IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: No inception date

Tax or social insurance relief

The stated purpose of the 2010 revisions to the Korean tax law is to create jobs and support "the low-income class." While many of the measures appear to be neutral to foreign commercial interests, not all are. For example, in a section titled "Key revisions" (to the tax law) it is said that "companies closing overseas business places and returning to Korea to be offered income and corporate tax reductions at the levels given to companies with FDI." Later the press release notes "Companies that close down foreign factories and return to Korea to establish a new business will receive income and corporate tax deductions of 100 percent for the first 3 years and 50 percent for the next 2 years."
 
Another concern may be the following: "...the expiration for the preferential treatment for deemed input VAT in restaurant businesses will also be extended until the end of 2012." This VAT deduction was due to be phased out in 2010 and almost certainly refers to agricultural and fish purchases. 
 
Other proposals may be beneficial to foreign commercial interests including "reduced tariff rates to be adopted to the imports of materials and parts used in new growth engine related industries" (no definition of those industries was provided.) Later the document states "Tariff rate (sic) for 46 primary raw materials and components related to new growth engine industries will be reduced, while the 50 percent tariff reduction for digit TV broadcast equipments's' (sic) imported by broadcasting businesses will be extended from the end of 2010 to the end of 2012." 
 
Another potential benefit to foreign commercial interests is the extension to 2013 of tax deductions for foreign resource development investment and facility development in pharmaceutical quality improvement. Less clear is the statement "Tax support for low carbon, green growth technologies will be increased, with related technologies including carbon reduction and enviroment-friendly vehicles becoming eligible for foreign investment tax deduction."

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

473 Broadcast recording apparatus; microphones, loudspeakers, etc.
8521 Video recording or reproducing apparatus, whether or not incorporating a video tuner.
852110 Magnetic tapetype
852190 Other
474 Parts for the goods of classes 4721 to 4733 & 4822
8522 Parts and accessories suitable for use solely or principally with the apparatus of headings 85.19 or 85.21.
852290 Other

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