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REGULATIONS DEFINING TAX EXEMPTIONS FOR FOREIGN INVESTMENT

Notice No. 2004016, Sep. 7, 2004

Amended by Notice No. 2006004, Mar. 8, 2006

Notice No. 2008010, Aug. 13, 2008

Notice No. 2010024, Oct. 1, 2010

Notice No. 2012017, Dec. 6, 2012

Notice No. 2015002, Jan. 7, 2015

Notice No. 2017010, Apr. 4, 2017

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of these Rules is to provide for matters necessary for tax exemption for foreign investment provided for in Articles 121-2 through 121-7 of the Restriction of Special Taxation Act (hereinafter referred to as the "Act"), Articles 116-2 through 116-13 of the Enforcement Decree (hereinafter referred to as the "Decree") of said Act and Articles 51 through 51-3 of the Enforcement Rule (hereinafter referred to as the "Rule") of said Act.
 Article 2 (Protection of Confidential Business Information)
In processing with an application for tax exemption for foreign investment, the Minister of Strategy and Finance or the competent Minister shall not disclose data deemed to substantially damage the due interests of the parties concerned where such data, which are matters concerning confidential business information of an applicant, are disclosed to the outside.
 Article 3 (Application of Statutes on Processing with Civil Petitions)
Except as provided for by the Act, the Decree, the Rule and these Rules, the Civil Petitions Treatment Act and its subordinate statutes shall apply to an application for tax exemption for foreign investment.
CHAPTER II TAX EXEMPTION FOR FOREIGN INVESTMENT
 Article 4 (Businesses Eligible for Tax Exemption)
A business eligible for tax exemption for foreign investment means a business referred to in Article 121-2 (1) of the Act.
 Article 5 (Documents Necessary to Apply for Tax Exemption, etc.)
(1) Where a foreign investor or foreign investment company applies for tax exemption or for alteration in the subject-matter of tax exemption under the provisions of Article 121-2 (6) of the Act, or for prior confirmation of her his/her or its foreign investment’s eligibility for tax exemption under the provisions of paragraph (7) of said Article, he/she or it shall attach documents specified in attached Table 2 of these Rules to such application.
(2) Where a foreign investor intends to report foreign investment under Article 5 (1) and 7 (1) 4 and 5 of the Foreign Investment Promotion Act and to apply for tax exemption under Article 121-2 (6) of the Act at the same time, he/she shall submit such report and application to the head of a foreign exchange bank (hereinafter referred to as "head of an entrusted institution") entrusted with the authority of the Minister of Trade, Industry and Energy pursuant to the provisions of Article 40 (2) of the Enforcement Decree of the Foreign Investment Promotion Act. In such cases, when the head of an entrusted institution issues a certificate of reporting of foreign investment, he/she shall immediately send a copy thereof and all accompanying documents to apply for tax exemption to the Minister of Strategy and Finance.
(3) Where the Minister of Strategy and Finance determines tax exemption, alteration in the subject-matter of tax exemption or prior confirmation of foreign investment’s eligibility for tax exemption in response to an application under the provisions of paragraph (1), he/she shall immediately notify the competent Minister of the relevant industry, the Minister of Trade, Industry and Energy, the head of a local government, the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service and the head of the relevant entrusted institution of such fact.
 Article 6 (Consultation on Tax Exemption)
(1) The competent Minister and the head of a local government requested to submit his/her opinion pursuant to the provisions of Article 121-2 (8) of the Act shall submit his/her opinion to the Minister of Strategy and Finance and notify an applicant of such fact within 20 days from the date he/she receives such request: Provided, That where he/she deems that it inevitably takes long time to determine whether to grant tax exemption, he/she may extend a period within 20 days. In such cases, he/she shall notify the Minister of Strategy and Finance and the applicant of grounds for extension and the extended period.
(2) Where any documents necessary to apply for tax exemption or mentioned items are omitted or the mentioned content is unclear, or the Minister of Strategy and Finance or the competent Minister or the head of a local government requested to submit his/her opinion pursuant to the provisions of paragraph (1) deems it essential to determine whether to grant tax exemption, he/she may request an applicant to supplement or revise documents necessary to apply for tax exemption by setting a period of at least seven days. In such cases, where the applicant requests him/her to extend such period, he/she may extend the period for supplementation or revision.
(3) Where the competent Minister or the head of a local government requests an applicant to supplement or revise documents necessary to apply for tax exemption pursuant to the provisions of the former part of paragraph (2), he/she shall immediately notify the Minister of Strategy and Finance of such fact.
(4) A period spent to supplement or revise documents necessary to apply for tax exemption pursuant to the provisions of paragraph (2) shall not be included in a processing period under the provisions of Article 116-3 (1) and (2) of the Decree and a period for submission of opinions under the provisions of paragraph (1).
 Article 7 (Reporting of Corporate Tax Exemption, etc.)
Where a foreign investor or foreign investment company notified of the determination of tax exemption or the determination of alteration in the subject-matter of tax exemption pursuant to the provisions of the main sentence of Article 121-2 (8) of the Act seeks corporate tax or income tax exemption, he/she or it shall submit a tax return under the provisions of the Corporate Tax Act or the Income Tax Act, and an application for exemption from the amount of tax in a form prescribed by the Commissioner of the National Tax Service to the head of the competent tax office.
 Article 8 (Post Management, etc. of Persons to whom Tax Exemption is Granted)
(1) Where the designation of a foreign investment area is revoked pursuant to the provisions of Article 25 (6) of the Enforcement Decree of the Foreign Investment Promotion Act during the period of tax exemption of a foreign investor or foreign investment company to whom tax exemption is granted pursuant to the provisions of Article 121-2 (1) 2 of the Act, the head of a local government, the Commissioner of the National Tax Service or the Commissioner of the Korea Customs Service shall immediately cease tax exemption.
(2) The head of a local government, the Commissioner of the National Tax Service or the Commissioner of the Korea Customs Service may prescribe matters necessary for the post management of a foreign investor or foreign investment company to whom tax exemption is granted pursuant to the provisions of Articles 121-2 through 121-4 of the Act. In such cases, the head of a local government, the Commissioner of the National Tax Service or the Commissioner of the Korea Customs Service shall consult in advance with the Minister of Strategy and Finance.
 Article 9 (Time limit for re-examination)
The time limit by which measures such as the amendment of this Ordinance are to be taken pursuant to the Regulations on the Issuance and Management of Directives and Established Rules, considering the Acts and subordinate statures enacted or the changes in actual conditions occurring after the issuance of these Regulations, shall be December 31, 2020.
ADDENDA
(1) These Rules shall enter into force on the date of their promulgation.
(2) Notwithstanding paragraph (1), the former provisions shall apply where there occurs a ground for additional collection under Article 121-5 of the Restriction of Special Taxation Act in effect before Article 116-10 (3) of the Enforcement Decree of the Restriction of Special Taxation Act was newly Inserted.
ADDENDUM <Public Notice of the Ministry of Strategy and Finance No. 2008-10, Aug. 13, 2008>
Article 1 (Enforcement Date)
These Rules shall enter into force on the date of their promulgation.
ADDENDA <Public Notice of the Ministry of Strategy and Finance No. 2010-24, Oct. 1, 2010>
Article 1 (Enforcement Date)
These Rules shall enter into force on the date of their promulgation.
Article 2 (Transitional Measure concerning Repeal of Tax Exemption of Technology Introduction Fees)
Notwithstanding the amendment of these Rules, the former provisions shall apply, in accordance with Article 77 of the Addenda of the Restriction of Special Taxation Act (Act No. 9921, January 1, 2010), to technology introduction fees paid pursuant to agreements on technology introduction stipulating the payment of technology introduction fees for the first time before December 31, 2009.
ADDENDUM <Public Notice of the Ministry of Strategy and Finance No. 2012-17, Dec. 6, 2012>
Article 1 (Enforcement Date)
These Rules shall enter into force on the date of their promulgation: Provided, That the former Rules (Public Notice No. 2010-24 of the Ministry of Strategy and Finance) shall apply to technologies deleted from industries eligible for tax exemption referred to in attached Table 1 for three months from the date of promulgation.
ADDENDUM <Public Notice of the Ministry of Strategy and Finance No. 2015-2, January 7, 2010>
Article 1 (Enforcement Date)
These Rules shall enter into force on the date of their promulgation: Provided, That the former Rules (Public Notice No. 2012-17 of the Ministry of Strategy and Finance) shall apply, for three years from the date of promulgation, to the technologies deleted from the list of such businesses subject to tax reduction or exemption as specified in attached Table 1.
ADDENDUM <Public Notice of the Ministry of Strategy and Finance No. 2017-10, April 4, 2017>
Article 1 (Enforcement Date)
These Rules shall enter into force on the date of their promulgation.