Recent Trend of Foreign Direct Investment


ΆΓ  Foreign-acquired firms eligible for tax breaks

Korea Herald 2000.12.07

Local companies that become acquired or merged by foreign investors will soon be eligible for tax breaks, the Ministry of Finance and Economy said yesterday.

This is because stock acquisition interest payments on such transactions would be counted as expenses, which translate to reduced taxes, the ministry said.

The decision stemmed from inquiries from the National Tax Service, which had difficulties determining whether stocks gained from a merger with a foreign investor should be eligible for tax deductions, ministry officials said.

"By eliminating such uncertainties involving the merger between foreign investment firms and local institutions, this will hopefully have the effect of boosting foreigners' investment levels," a ministry official said. (CYS)