Government Advances Implementation of 'Tax Exemption' on Foreign Companies' National Bond Interest Starting This Month... Legislative Notice Issued

[Asia Economy Sejong=Reporter Son Seonhee] The government announced on the 17th that it will amend the related enforcement decrees to apply tax exemption on interest and capital gains from government bonds held by non-residents and foreign corporations. Although a tax law amendment with the same content has already been submitted to the National Assembly, the enforcement decree amendment is being pursued to advance the implementation timing as it will take time for the law to be revised.

The Ministry of Economy and Finance plans to give legislative notice on the 19th for the amendment of the 'Income Tax Act Enforcement Decree' and the 'Corporate Tax Act Enforcement Decree' with this content. Accordingly, interest and capital gains on government bonds and Monetary Stabilization Bonds (T-Bonds) held by non-residents and foreign corporations will be subject to a zero tax rate (tax exemption). However, since the related law is scheduled to be amended from next year, this enforcement decree amendment will be applied temporarily until the end of this year.

The Ministry of Economy and Finance stated that this measure is expected to increase foreign investment in government bonds and stabilize the financial market by lowering government bond yields.

Furthermore, as news was reported on the 29th of last month that Korea was listed as a watchlist country for the World Government Bond Index (WGBI), one of the world's largest bond indices, this tax exemption measure is expected to induce foreign investment in government bonds.

This enforcement decree amendment is scheduled to be promulgated and enforced within this month after going through the Deputy Prime Minister and Cabinet meetings.

This content was produced with the assistance of AI translation services.