SEJONG, Feb. 6 (Korea Bizwire) — South Korea’s finance ministry said Tuesday it would delay the implementation of a revised tax scheme designed to widen the taxation base among foreign investors in the face of strong calls from related industries to scrap such a move.
Under the revised tax schemes, the Seoul government was planning to collect capital gain taxes from foreign investors who own more than 5 percent stakes in locally listed companies, lowering the ownership threshold from 25 percent.
But the ministry said it would review the implementation of the revised scheme later on.
Local securities firms have been protesting the recent tax revision, citing the absence of an effective monitoring system.
Securities firms have been raising issues with the move, as it requires them to check the shares owned by foreigners, track changes in their portfolios and confirm profits gained from each transaction to levy the capital gains tax as withholding tax.
Such firms are contending that they currently do not possess the information needed to support the new tax system.
They also point out that 47 percent of shares registered with foreign owners are in the form of investments through stock funds, making it nearly impossible to trace the actual owners.