Korea: Real estate fund trust dividends | KPMG | GLOBAL

Korea: Real estate fund trust dividends; withholding tax refunds

Korea: Real estate fund trust dividends

An official public tax ruling from the South Korea Ministry of Strategy and Finance allows for a reduced rate of withholding tax on dividends distributed from South Korean real estate fund trusts.


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The ruling provides companies that are residents in countries that have an income tax treaty with South Korea may benefit from a reduced rate of withholding tax—a 5% rate instead of 15%—on dividends distributed from South Korean real estate fund trusts, provided that certain conditions are satisfied. 

  • The real estate fund trust must be established before 4 November 2015.
  • The beneficial owner of the dividends of the real estate fund trust must have a direct investment in the trust.
  • The beneficial owner must be a resident of a country that has a tax treaty with South Korea and must satisfy conditions in that treaty.
  • The beneficial owner must have at least a 25% beneficial ownership interest in the real estate fund trust.

KPMG observation

The ruling may provide opportunities for refunds of withholding tax paid, for a three-year period (the statute of limitations). An application to the Korean tax authorities proving that the conditions listed above also will be required to maintain a refund claim.

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