If the resident is not conducting business:

The regulations were defined in FIPA, but due to amendments announced on May 24, 1999, only general principles of tax deduction are in FIPA. The details of tax deductions can be found in Art.121 of the Special Tax Treatment Control Act. 

The transferor has to pay transfer income tax (10% of transfer amount or 25% of transfer profit, whichever is smaller), inhabitant tax (10% of transfer income tax), and security transaction tax (0.5%).

If the corporation issuing the shares is in possession of assets subject to taxation, and if the transferee acquires more than 51% of the shares, then 2% of acquisition tax will be levied.

It is possible to receive tax deductions even if it not a high-tech business. The conditions are that the foreign investor has to invest more than the minimum amount of investment and get the permission for designation as a foreign-investment zone from the foreign investment commission and the governor from the province or city for the establishment of the factory. If the decision is positive, then the investor can receive tax benefits.For reference, the minimum investment amount for the manufacturing sector is US$30 million, for tourism and hotels US$20 million, for distribution and logistics US$10 million and for high-tech and R&D facilities US$50 million.

It is possible to receive tax benefits for high-tech businesses regardless of their location. 

Income as defined in tax laws is total profits minus total losses

If losses accumulated over the years, then the tax deduction will start from the year when the first income is recorded (if there were no income for the past five years, then the first income is assumed to be in the fifth year). That does not mean that all the losses are preserved until the year when income is recorded.

Generally, both local company and branch office have to pay corporate tax (15.27%), inhabitant tax (10% of corporate tax), and VAT (10%).From 2005, corporate tax will be reduced by 2%.For certain countries, such as France, Canada, and Australia, a branch office tax (5-15%) is levied under certain conditions.

Tax agreements with other countries can be found on the National Tax Office homepage: www.nts.go.kr 

The taxes for real estate such as land/ buildings are as follows:

There are no tax deductions for acquisition of land for foreigners. However, part of local tax will be deducted, if land is acquired by a foreign-invested company to conduct business, which is subject to tax deduction. 

If establishing new or additional research facilities for R&D activities of high technology for industrial-supporting service, with an investment of more than US$5 million as well as designated as a foreign investment zone with more than 10 employees having more than three years experience with at least a Master’s degree, then tax deduction of 100% for 7 (5) years and 50% for 3 (2) years in terms of corporate tax are given to the share of foreign investment.