Exchange of Notes, Convention between the Republic of Korea and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on Income.

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National Graduate Institute for Policy Studies (GRIPS); Institute for Advanced Studies on Asia (IASA), The University of Tokyo

[Title] Exchange of Notes, Convention between the Republic of Korea and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on Income.

[Place] Tokyo

[Date] October 08, 1998

[Source] United Nations Treaty Collection

[Notes]

[Full text]

Ministry of Foreign Affairs and Trade, Republic of Korea

Tokyo, October 8, 1998

Excellency,

I have the honour to refer to paragraph 3 of Article 23 of the Convention between the Republic of Korea and Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income which was signed today and to confirm, on behalf of the Government of the Republic of Korea, the following understanding reached between the Government of the Republic of Korea and the Government of Japan:

The measures set forth in the following Articles and paragraphs of Korean taxation laws are “the special incentive measures designed to promote economic development in Korea, effective on the date of signature of this Convention” referred to in the said paragraph.

1. Paragraphs 1, 2 and 3 of Article 94 of Tax Reduction and Exemption Control Act, Law No. 5534, 1998 -- relating to exemption from income tax or corporation tax on the income and capital gains from international financial transactions.

2. Foreign Investment and Foreign Capital Inducement Act, Law No. 5538, 1998:

(i) Paragraphs 1, 2 and 3 of Article 14 -- relating to reduction and exemption from income tax or corporation tax on the income of a foreign invested enterprise or foreign investor;

(ii) Paragraph 1 of Article 16 -- relating to reduction and exemption from income tax or corporation tax in case where a foreign invested enterprise increases its capital;

(iii) Paragraph 1 of Article 24 -- relating to exemption from income tax or corporation tax on the income derived from a technological inducement contract; and

(iv) Paragraphs 1 and 2 of Article 28 -- relating to reduction and exemption from income tax or corporation tax on the income derived from a public loan contract.

I have further the honour to propose that the present Note and your Excellency's Note in reply confirming the foregoing understanding shall be regarded as constituting an agreement between the two Governments under paragraph 3 of Article 23 of the said Convention.

I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.

HONG SOON-YOUNG

Minister of Foreign Affairs and Trade of the Republic of Korea

His Excellency

Mr. Masahiko Koumura

Minister for Foreign Affairs of Japan

Tokyo, October 8, 1998

Excellency,

I have the honour to acknowledge the receipt of Your Excellency's Note of today's date which reads as follows:

[See note I]

I have further the honour to confirm on behalf of the Government of Japan the foregoing understanding and to agree that Your Excellency's Note and this Note shall be regarded as constituting an agreement between the two Governments. I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.

MASAHIKO KOUMURA

Minister for Foreign Affairs of Japan

His Excellency

Mr. Hong Soon-young

Minister of Foreign Affairs and Trade of the Republic of Korea