The standard tax base for income tax is calculated by deducting the income tax and general income tax from the total income:

In principle, the confirmation of completing investment in kind is issued when the import of the capital good is completed.
If the capital goods are imported in steps, then the confirmation is issued after the last customs clearance was processed for all capital goods.
However, if the introduced price of capital goods is relatively high, the confirmation can be issued exceptionally. (for example: first part of capital goods are imported in March, 2005 and the second part of the capital goods are imported in June, 2006) 

Even if the raw material for export is imported costless, the duty has to be paid according to tax rate (the same is for import-export trade among affiliates)
However, it is possible to get the paid duty refunded, if the imported raw material is used for the manufacturing of products for export, after the export process is completed, and if the lump-sum payment and posterior payment system are used, payment of duties can be reduced. 

It is necessary to disclose any changes before company registration. 

♦ Businesses eligible to move into the Free Trade Zones:

– Manufacturing and logistics businesses operated by a local foreign-invested company as
stipulated in the Act on the Designation of Free Trade Zones;
– Local logistics businesses as stipulated in the Act on Designation and Management of
Customs-Free Zones for Fostering International Logistics Centers.

♦ Investment conditions and amount of investment

– New factory facilities have to be set up with an investment amount of at least US$ 10mil.
for the manufacturing sector and US$5 mil. for the logistics sector
– Exemption of corporate and income tax rates: Corporate tax shall be exempted for the
first three years after income accrues, and reduced by 50% for the following two years. If
no income accrues during five years, then tax shall be exempted for five years since
establishment.

<Businesses in the Masan and Iksan Free Trade Zones>

– Businesses in the Masan and Iksan areas (formerly free export zones) are considered to
be Free Trade Zones and are therefore subject to the same conditions as for Foreign
Investment Zones with regard to tax reduction and rent.
– In other words, foreign-invested companies located in the free export zones are subject
to the same conditions with regard to tax reduction and benefits as businesses in Foreign
Investment Zones. 

From the day of FDI notification until 2 years from that date. 

The withholding tax is selected from whichever is lower among the two tax rates.
What is the restrictive tax rate?

– The restrictive tax rate is a tax rate agreed upon through a tax agreement, which does
not permit the taxation above a certain maximum rate for investment profits such as
interest, dividend or fees.

If a foreign company with direct or indirect investment from a Korean citizen or company (excluding overseas Koreans with permanent residence or equivalent status) conducts foreign investment in Korea, then the investment rate of the Korean citizen or company is not subject to tax deduction pursuant to Art. 121 of the Special Tax Treatment Control Law.
If the rate of investment by the Korean citizen or company is less than 10%, this rule does not apply.
In this case, the rate of investment by the Korean company G is more than 10%, and thus, that part will be applicable to tax deduction. 

According to Art. 18 of the Special Tax Treatment Control Law, a foreign engineer providing work to a Korean national is exempted from income tax for five years.Pursuant to Art. 16 of the Enforcement Decree of the Special Tax Treatment Control Law, the technology and the work provided by the foreign engineer has to be subject to deduction of corporate tax. 

If a foreign investor is purchasing the capital goods to be used as investment in kind, then the price will be determined depending on the other factors concerning shipment and additional cost. For example, if the foreign investor has paid transportation cost and insurance fee until the goods arrive at the destination, then the cost for that will be included in calculating the final price. Thus, the final price will be accepted as the amount of foreign investment.
Process of Investment in Kind