News

Korea blasted for plan to change tax rules

Tax_calculatorA trade association has criticised Korea's plan to lower the ownership threshold at which foreign investors are liable for capital gains tax. On July 1, 2018, according to draft regulations, foreign investors will pay capital gains tax on listed equity transactions if they hold 5% or more of the company at the time of sale or at any time in the past five years. Currently, the threshold is 25%. “This is a significant change that poses extremely challenging operational hurdles for securities companies and for the overall Korean market infrastructure for little or no additional tax revenue for the Korean government,” said the Asia Securities Industry and Financial Markets Association (ASIFMA). The association claimed the tax revenues would be low because “the overwhelming majority” of foreign investors in Korea own less than 5% of the companies they invest in. But to prove transactions are exempt from capital gains tax, foreign investors would require back-dated financial information that is costly and difficult to obtain. Complying with the proposed rules would therefore require “substantial investment in technology and process” and would entail “major disruptions”, said the association. In addition, ASIFMA warned that securities companies in Korea may decide to apply an 11% withholding tax on foreign investors' transactions as a blanket measure to protect themselves from secondary tax liability. Foreign investors would have to recoup this money from the government. “A 11% withholding on all sales proceeds will have a significant detrimental impact to foreign investors and a disastrous consequence for the Korean equities market,” said ASIFMA. ©2018 funds global asia

Opinion

A quiet revolution in Japan’s corporate governance

revolution, Japan, corporate governance, Shareholders, corporate, governance, standards, improvement, Tetsuro Takase, SuMi TrustShareholders in Japan no longer accept below-par corporate governance standards. Changes...

Why rising demand for healthcare is creating investment opportunities in China

rising demand, healthcare, investment, opportunities, China, Robert St Clair, Investment Strategy, Fullerton Fund ManagementRobert St Clair, head of investment strategy at Fullerton Fund Management, explores the...

Why take advantage of the recent dip in China’s internet sectors

advantage, China, internet, market, OctoberChina's internet market presents one of the most compelling long-term growth potentials for investors today, given the catalysts supporting the...

India’s growing importance to the global economy

India, importance, global economy, Apple, iPhone, ChinaThe China Plus One narrative might affect “the world’s factory” and give opportunities for India and other countries well-placed to assume...

Executive Interviews

Executive interview: PGIM CEO on where the ESG flowers should bloom

Sep 27, 2021

David Hunt, president and chief executive of PGIM, tells Romil Patel about leading a top 10 global asset manager in times where “empowering and encouraging the kind of investment decisions as...

Executive interview: Nicolas Moreau’s orderly transition

Jul 12, 2021

Nicolas Moreau, CEO of HSBC Asset Management, is moving to Asia as the firm looks to connect more directly with the region’s growth story. ESG is also a key focus – including the ‘just’ carbon...

Roundtables

Roundtable: Singapore comes of age as an Asian ESG hub

Dec 01, 2021

Strong ESG credentials strengthen the case for Singapore as a leader in Asia of the post-Covid recovery. Our panel discusses the risks and opportunities.

Roundtable: How well geared are Japanese assets for a new world?

Jul 12, 2021

As we prepare to emerge from Covid, experts look at overcoming demographic issues through a combination of good tech and corporate governance, improving productivity and meeting an ambitious government carbon emissions reduction target. Chaired by Romil Patel.