Seoul to downsize tax investigations into foreign firms.

(From The Korea Herald)

By Kim Ji-hyun The Korean government will reduce the scope of its tax investigations into foreign-invested companies in a bid to draw more direct investment from abroad, the National Tax Service said yesterday.

To keep aligned with last year's tax reforms, the tax service said that beginning with companies required to file their corporate taxes next month, it will focus only on those in clear violation of relevant laws. Honest taxpayers will be rewarded for their efforts, it added, as multinational companies will qualify for the Exemplary Taxpayer Awards this year.

Winners of the award receive preferential treatment through various benefits such as a three-year exemption from audit and VIP client status at financial institutions. The announcement comes following the amendment of the International Taxes Act last year under which the tax office decided to implement consistent and predictable regulations and scrap rules considered to be out of synch with global standards.

"This will be an encouragement for foreign companies to invest in Korea because they have been complaining about tax regulations," said Alan Timblick, head of InvestKOREA, the investment arm of the state- run Korea Trade-Investment Promotion Agency. He pointed out that above all, multinational companies will be relieved of anxiety they suffered under previous regulations that were often deemed as ...